Hallwood Energy Partners, L.P. Announces Fourth Quarter and Annual Results for 1998.DENVER--(BUSINESS WIRE)--March 24, 1999--Hallwood Energy Partners, L.P. (AMEX AMEX See: American Stock Exchange : HEP and HEPC HepC Hepatitis C HEPC Handloom Export Promotion Council (India) HEPC Historical Electromagnetic Propagation Conditions HEPC High Energy Proportional Counter HEPC Hispanic Employment Program Coordinator ) today reported revenues for the fourth quarter of 1998 totaling $10,761,000, compared to $12,473,000 for the fourth quarter of 1997. Gas production was 3.6 bcf for the fourth quarter of 1998 compared to 3.2 bcf for the fourth quarter of 1997. The price received for gas production for the fourth quarter of 1998 was $2.02 per mcf, compared to $2.56 per mcf for the fourth quarter of 1997. Oil production totaled 193,000 barrels for the fourth quarter of 1998, compared to 189,000 barrels for the fourth quarter of 1997. The oil price received for fourth quarter 1998 production was $12.36 per barrel, compared to $18.69 per barrel for the fourth quarter of 1997. For the quarter ended December December: see month. 31, 1998, the Class A and Class B limited partners had a net loss of $7,580,000, which includes non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $6,598,000, compared to net income of $2,024,000 for the fourth quarter of 1997. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net loss per Class A and B Unit was $.82 per Unit for the fourth quarter of 1998 and diluted net income was $.20 per Unit for the fourth quarter of 1997. The non-cash charges include a property impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of $4,800,000 which was taken to lower the capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. cost of HEP's properties to an amount equal to the present value, discounted at 10%, of the future net revenues attributable to those properties, as required by the Securities and Exchange Commission's rules, and HEP's equity in the loss of its affiliate, Hallwood Consolidated Resources Corporation (Nasdaq: HCRC HCRC Human Communication Research Centre (University of Edinburgh) HCRC High Capacity Radio Concentrator HCRC Halton Community Rehabilitation Centre (Ontario, Canada) ) of $1,798,000. Total revenue for 1998 was $43,586,000, compared to $45,103,000 for 1997. Oil and gas prices, including the effects of hedging, averaged $13.65 per barrel and $2.02 per mcf for 1998, compared to $19.08 per barrel and $2.31 per mcf for 1997. Oil and gas production for 1998 increased 14% to 787,000 barrels and 14.0 bcf, compared to 770,000 barrels and 11.8 bcf for 1997. Production increased during 1998 primarily because two temporarily shut-in shut-in n. A person confined indoors by illness or disability. adj. 1. Confined to a home or hospital, as by illness. 2. Disposed to avoid social contact; excessively withdrawn or introverted. wells were back on line. The two wells were temporarily shut-in during the second quarter of 1997 while workover procedures were performed. HEP's hedges have mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. oil and gas price declines by increasing revenue by $1,074,000. Combined operating, general and administrative and interest expenses were 11% lower during 1998 on a unit of production basis. During 1998, the Class A and Class B limited partners had a net loss of $17,245,000, which includes non-cash charges of $18,888,000, compared to net income to the Class A and Class B limited partners of $10,042,000 for 1997. Diluted net loss per Class A and Class B Unit was $1.86 per Unit for 1998, and diluted net income was $1.07 per Unit for 1997. The non-cash charges include a property impairment of $14,000,000 and HEP's equity in loss of its affiliate of $4,888,000. HEP expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. $40,936,000 on capital projects during 1998. HEP's reserve replacement from all activities, including revisions, equaled 72% of its 1998 oil and gas production, using year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. prices of $10.00 per barrel of oil and $1.90 per mcf of gas. If year-end prices had been equal to the five-year weighted average prices received by HEP of $16.75 per barrel of oil and $1.86 per mcf of gas, management estimates that HEP's reserve replacement from all activities, including revisions, would have equaled 136% of its 1998 production. In December 1998, HEP announced a proposal to consolidate HEP with its affiliate, Hallwood Consolidated Resources Corporation and the energy interests of The Hallwood Group Incorporated into a new corporation called Hallwood Energy Corporation. The consolidation proposal was approved by the Board of Directors of HCRC and the general partner of HEP in December 1998. A Joint Proxy Statement/Prospectus for the consolidation was filed with the Securities and Exchange Commission on December 30, 1998 and is proceeding through the usual SEC comment process. It is presently anticipated that the Joint Proxy Statement/Prospectus will be mailed to unitholders of HEP and shareholders of HCRC in April and that the consolidation will be concluded in May 1999. There can be no assurance, however, that all conditions to the consolidation will be satisfied by that time. HEP is a public oil and gas master limited partnership headquartered in Denver, Colorado with properties primarily located in South Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , the San Juan Basin The San Juan Basin is a drainage basin and geologic structural basin in the Four Corners region of the Southwestern United States; its main portion covers around 4,600 square miles, encompassing much of northwestern New Mexico, northeastern Arizona, and parts of Colorado and Utah. in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). and Colorado, West
Texas and the Rocky Mountain region The Rocky Mountain Region is a floristic region within the Holarctic Kingdom in western North America (Canada and the United States) delineated by Armen Takhtajan and Robert F. Thorne. .
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HALLWOOD ENERGY PARTNERS, L.P.
SUMMARIZED FINANCIAL INFORMATION
FOURTH QUARTER AND FISCAL 1998
(In thousands except per Unit and prices)
Quarter Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
---- ---- ---- ----
Oil and Gas Revenue $ 9,592 $11,680 $39,107 $41,910
Other Revenue 1,169 793 4,479 3,193
Total Revenue 10,761 12,473 43,586 45,103
Depreciation & Depletion 4,486 3,304 15,720 11,961
Impairment of Oil and Gas
Properties 4,800 14,000
Other Expenses 8,285 6,290 27,761 20,339
Total Expense 17,571 9,594 57,481 32,300
Net Income (Loss) $(6,810) $ 2,879 $(13,895) $12,803
Allocation of Net
Income (Loss):
General Partner $ 154 $ 689 $ 886 $ 2,097
Class C Unitholders $ 616 $ 166 $ 2,464 $ 664
Class A and B Limited
Partners $ (7,580) $ 2,024 $(17,245) $10,042
Per Class A and B
Unit - Basic $ (.82) $ .22 $ (1.86) $ 1.09
Per Class A and B
Unit - Diluted $ (.82) $ .20 $ (1.86) $ 1.07
Production:
Oil - barrels 193 189 787 770
Gas - mcf 3,574 3,185 14,037 11,774
Price:
Oil - per barrel $12.36 $18.69 $13.65 $19.08
Gas - per mcf $ 2.02 $ 2.56 $ 2.02 $ 2.31
Proved Reserves as of year end:
Oil - barrels 4,487 5,767
Gas - mcf 94,939 93,053
Present Value of Future Net
Cash Flows (discounted
at 10%) $101,000 $129,000
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